• Lockdown measures put Malaysia manufacturers under extreme pressure

• Global manufacturing PMI slumps to lowest level since GFC

• US manufacturing activities slumps in April

• Eurozone factory output plunges at fastest pace on record

• UK manufacturing activity contracts at fastest pace on record

• China’s manufacturing deteriorated slightly as Covid-19 pandemic weighs on demand

• Japan’s manufacturing activity shrinks at fastest pace in 11 years

• ASEAN manufacturing downturn deepens

Lockdown measures put Malaysia manufacturers under extreme pressure

Malaysia's manufacturing sector came under extreme pressure during April as measures implemented to tackle the spread of Covid-19 caused firms to either suspend production or operate well below full capacity. The manufacturing PMI slumped to 31.3 in April from 48.4 in March. The most commonly cited factor weighing on the manufacturing economy during April was the implementation of restrictions both at home and in exports markets to contain the spread of the coronavirus, which severely restricted demand. New orders fell sharply during April as a result of the global Covid-19 pandemic, which had resulted in lockdowns being implemented at both domestically and overseas. Latest data also signalled a substantial and survey-record decline in export demand during April, with approximately 83% of companies reporting lower orders from abroad. Supply chain delays also impeded manufacturers in April. Also, buying levels shrank the most on record, with employment declining modestly, amid the movement control order. Prices data showed a deflationary trend. Prices paid for raw materials and other inputs fell when compared to March. This gave firms more room to reduce output charges, which fell at the quickest rate since January 2015. Finally, confidence edged up into positive territory as companies anticipate an economic recovery over the course of the coming year.

Source: BIMB Securities Research - 5 May 2020